Russian Firm Pledges US$3 Billion for Maluku Nickel Smelting Plant
Dion Bisara & Camelia Pasandaran. The Jakarta Globe, Jakarta â€“ 16/02/2011
A unit of Russia’s Solway Industries has committed to invest $3 billion to build a nickel smelting plant in Halmahera, North Maluku, senior officials said on Monday.
Gita Wirjawan, the head of the Investment Coordination Board (BKPM), said Solway Industries plans to construct a nickel smelter with a capacity of 50,000 tons per year.
“[Solway] plans to build the smelter this year. We expect the groundbreaking will take place in the first half of the year,” the BKPM chief told Dow Jones Newswires.
According to the Russian company’s Web site, it holds several exploration concessions in Indonesia. The concession in Halmahera is estimated to contain about 114 million tons of high-quality nickel ore.
Southeast Asia’s biggest economy currently includes three nickel smelters controlled by state-owned company Aneka Tambang. They produce more than 18,000 tons of ferro-nickel, an alloy that contains up to 45 percent nickel, each year.
The country also produces nickel matte, which is more than 75 percent pure nickel, from a smelter operated by Inco, which has an annual capacity of 72,500 tons.
Coordinating Minister for the Economy Hatta Rajasa said Solway’s commitment was in line with the country’s bid to increase the value of its natural resource exports.
“Currently, Russia buys nickel ore, but we plan not to export it any more so it should all be processed here,” Hatta said.
The government has passed a new mining and coal law that requires miners to process their minerals prior to export by 2014.
Last year, raw materials such as coal, palm oil, minerals and metals accounted for more than a third of the country’s non-oil and gas exports of Rp 129.7 trillion ($14.5 billion).
Hatta said the project would not receive any fiscal incentives, such as a tax holiday.
“It doesn’t need fiscal incentives. The natural resources themselves are kind of an incentive because you won’t find them anywhere else. We may lift import tax for building the plant, but that’s all,” he said.